Dec. 18, 2015, the article BlackBerry reports 3rd-quarter loss but tops expectations reports BlackBerry Limited a loss of $89 million in its fiscal third quarter. BlackBerry shares have dropped 29 per cent since the beginning of the year. The stock has fallen 22 per cent in the last 12 months.

The report made me disappointed again and immediately think of the sad experiences from working in different Canadian enterprises, I got a sense that BlackBerry was rebirth from former Research In Motion - RIM, such a background would make it still existing the fatal DNA towards decline, since that BlackBerry was composed of former RIM’s employees that have accustomed Canadian pop corporate culture – a culture that encourages people to ask more by doing less and dared boldly make mischief at workplace, even some management staff dared play atomic bombing with a right for farting, without a sense that enterprise is the lifeboat in sharing by employer and employees to struggle for survival.

Such behavior of taking stupid as smart is actually nourished by absurd values that are legally protected and excessive self-appreciated under populist democratic polity – a polity encourages democratic players doing every possible to please voters with expending of national interest, due to without essential prerequisite for ensuring the quality of political candidates. If you review the background of those Government Members, the majority of them, besides full hearted playing tricks for pleasing voters, barely have basic quality as policy makers needed - education, knowledge, experiences, and especially, a rational mind for fulfilling their sacred social governance duties.

Such wrongful corporate culture and social ideology is the fatal cancer in Canadian society, it will inevitably still dominate BlackBerry in corporate soul, corporate bone and corporate marrow, and it cannot entirely to be reborn.

Such ridiculous corporate culture and social ideology will disable any talented and experienced rational top executive, no matter how successful they are in other countries.

As an inheritor of RIM – the former flagship business of Canada, the success of BlackBerry Limited will be not only able to motivate a lot of upstream and downstream enterprises to form an industrial cluster, but also it can boost related social services – education, medical care, and commercial industries……, they are all crucial for developing economy and thereby to create a livable community.

We urgently need a high efficient prescription for entirely reviving Blackberry - with the world's best corporate hematopoietic mechanism and successful corporate DNA to essentially transform the corporate culture of Blackberry and then by its exemplary role to revive Canadian enterprises throughout Canada – the Canada where is our home place – the place where our families are relying on surviving.

While RIM and many world-class companies in declining, a lot of enterprises are developing against economic recession as powerful world-class market fighters.

In the same depressed economic and market environment, the failure or rise of an enterprise, will certainly be due to its intrinsic reasons. Dig out such lessons will be significant for the successful development of Blackberry, and for the successful development of Waterloo region.

We should also remember that Waterloo region is the manufacturing center of Canada.

Then, what is the fatal DNA and wrongful corporate culture that failed RIM

Jan. 27, 2014, the discussion in my article The Fatal DNA of RIM & Canadian Enterprises is worth to review in here, this topic, I excerpt some as follow.

RIM - Research In Motion Limited, as a successful high-tech enterprises, once was the pride of Canadians. Its Headquarter is just several blocks away from my home. Now is declined as BlackBerry Limited. 

Recent years, facing new competitors rapid rising, it has been retreating. The bad news are one after another continuously, the sales decline, the stock devaluation, downsizing, the arguments of the privatization or so, every bad news have deeply hurt my nerves.

However, that made me most sad is from a gossip, that is a second grade pupil said that her parents are both working in RIM, once, to be laid off together, their home will no money pay for mortgage, their new house will be repossessed by bank, She worries nowhere to live?

RIM, the total employee is nearly 20% of the population of it headquartered city, although that include the staff who works in the branches of other cities, but big proportion are from locals. So, its rise or fall will strongly impact the life of local community. However, for RIM's declining, besides the families of the founder, the families of their staff, and government officials of Waterloo City, I think that, there are few people would care about.

Nov. 4, 2013, the article BlackBerry receives investment of US$1 billion from Fairfax Financial and Other Institutional investors reported that: “John S. Chen to be appointed as Executive Chair of BlackBerry’s Board of Directors and Interim CEO."   

The report gave me a new hope. Finally, RIM gets solution to clean up the mess, the farce returns to serious play. 

How did the poison blood and fatal DNA damage the RIM?

It is that stifling intellectual work environment damages RIM.

The one of the important factors in the success of world-class enterprises is that encourages employees to participate in business management.

The successful enterprises are mainly driven by motivating their employees fully exerting intelligence.

The failed enterprises are mainly due to that their employees cannot free exerting their intelligence.

For RIM's decline, people can find many sound reasons, however, I think that, the most fundamental one is the stifling intellectual work environment, which is that suppresses the free exertion of intelligence of the employees without a effective channel for employees expressing their views freely to have damaged the driving force for continuously self-revolution, which is  essential to fit the market that increasingly rapid changes.

Such a corporate culture is common in Canadian enterprises, which is just opposite that of smart doing in German Companies and IBM.

May 28 2012, in my article The DNA of the Success of German Manufacturing, I indicate that the driven force for German outstanding manufacturing mainly comes from their government legislated management for rationalization proposals, which is to extract bonus from the profit gained in the application of the proposals to motivate all staff to pay their full talent into the business running since Mr.Krupp initiated it in 1872. That is 142 years ago.

May 28 2012, in my article, The DNA of the Success of IBM & America's best-run companies, I indicate that the driven force for patent invention of 102 years old IBM has been counting on the top of those world-class corporate giants in the United States for 20 consecutive years is the patent-related bonus incentive system. In IBM, for any staff, published an article, approved a patent, all have assessment records with regulated cash awards.

However, Canadian companies are just going on the contrary.

Two years ago, I read an article Open letter to BlackBerry bosses: Senior RIM exec tells all as company crumbles around him that posted in Jun 30, 2011. The writer is Jonathan S. Geller who is the founder of BGR - the biggest mobile news destination in the world.

In the article he said that:  “We have received an open letter to Mike and Jim from a high-level RIM employee (whose identity we have verified), and in an amazingly honest and passionate plea, this letter gives fascinating insights into what RIM must fix, and fast. RIM did not immediately respond to a request for comment.” 

The start of the open letter and the 8 suggestions as follow:

“To the RIM Senior Management Team:”

“I have lost confidence.”

“While I hide it at work, my passion has been sapped. I know I am not alone — the sentiment is widespread and it includes people within your own teams.”

 “Mike and Jim, please take the time to really absorb and digest the content of this letter because it reflects the feeling across a huge percentage of your employee base. You have many smart employees, many that have great ideas for the future, but unfortunately the culture at RIM does not allow us to speak openly without having to worry about the career-limiting effects.”

8 suggestions:

1) Focus on the End User experience.

2) Recruit Senior SW Leaders & enable decision-making.

3) Cut projects to the bone.

4) Developers, not Carriers can now make or break us.

5) Need for serious marketing punch to create end user desire.

6) No Accountability – Canadians are too nice.

7) The press and analysts are pissing you off. Don’t snap. Now is the time for humility with a dash of paranoia.

8) Democratise. Engage and interact with your employees — please!

The suggestions are not only pointed out the problems, but also offered workarounds, especially reconstruction of management, interaction with employees and to be managed in accountability. It shows the writer's honesty in deep concern for RIM's future, and well thought out.

Above 8 suggestions were all to hit on the root cause of the failure of RIM and perfect suitable for any businesses.

From above 8 suggestions, we could afeel that chaotic in the management.

However, RIM’s responds to open letter was not only with no thanks, instead, was somewhat hatred condemnation, the first paragraph is as follow: 

“An “Open Letter” to RIM’s senior management was published anonymously on the web today and it was attributed to an unnamed person described as a ‘high level employee”. It is obviously difficult to address anonymous commentary and it is particularly difficult to believe that a “high level employee” in good standing with the company would choose to anonymously publish a letter on the web rather than engage their fellow executives in a constructive manner, but regardless of whether the letter is real, fake, exaggerated or written with ulterior motivations, it is fair to say that the senior management team at RIM is nonetheless fully aware of and aggressively addressing both the company’s challenges and its opportunities.”

This is one of important lethal Gene fragment in RIM and Canadian enterprises.

A RIM scientist has similar experience of the Open Letter

After reading the open letters, RIM's responds, the emails of RIM's employees and the readers' comments, I once talked with a material scientist who is working in the lab of RIM. She said that she once wrote a suggestions’ letter to the management, but without any response.  She felt that the corporate culture of RIM is not worthy for appreciation.

Besides above, I once called my friends who were working in RIM at that time.

The one who works in the service department said that their work efficiency has a lot of room for improvement.

Obviously, in RIM, it has no normal channels for facilitating the communication between subordinates and superiors to promote the development with the wisdoms of all employees.

I call this phenomenon as the obstruction of enterprise, it is the main cause of RIM's decline, and the main cause of RIM did a dirty job with the outstanding employee.

A Middle management puts atomic bombs with a right for farting

Followed RIM responds to open letter, Jul 1, 2011, BGR published More letters to RIM; employees rally alongside anonymous exec, the writer Jonathan S. Geller said that:

“BGR published an open letter to Research In Motion yesterday.” “RIM responded. It wasn’t pretty, and it really didn’t address a single point that was made by the original plea. It wasn’t just RIM that responded, however — we received dozens of emails from current and former RIM employees detailing their stories, and essentially all agreeing with the open letter that was published on BGR.”

Following is the part of an email from a former RIM employee.

“I was an employee at RIM for a year and a half. I worked in the legal and business affairs departments, and despite having originally thought I’d landed the jackpot job-wise, it took no time for me to begin planning my exodus.”

“My first week started with a complete change in my title and duties without anyone telling me, and when I dared ask what was happening, the director (my boss) and her BFF the OD business partner ganged up on me and threatened to let me go, setting the tone for the remainder of my time there.”

“Over a year an a half, the four of us in the same position dwindled to just me and yet I was responsible for getting all four jobs done for the better part of a year, since this is how long it took the department to hire other entry-level people. Two individuals who had less education and experience (not to mention drive or intelligence) than me were promoted several times while my boss continued to tell me up and down that I had reached my ceiling at RIM due to my lack of education (two degrees!) and experience (5 years!)–as an administrative assistant. Rather than attempt to fight this system I figured I could transfer departments, only the company policy requires the supervisor to act as a liaison and reference for internal applicants. The insanely high turnover rate meant the department head wouldn’t let anyone go, in addition to refusing to promote from within (pets excepted). People were pitted against each other and an incredibly tense and hostile work environment was fostered. People around the office started referring to the office politics as “Survivor: RIM edition.” And we all remember the great movement to make recycling physically impossible across the entire company because one person let some confidential information slip.”

“Then, as I was saving up to return to school and make a better life for myself, I received a series of nasty emails from HR letting me know that since my boss had failed to log my vacation time a year earlier on SAP (despite my insistence on her doing it at three different times), I would have two full pay cheques deducted to “pay back” the company for what was being portrayed as my mistake. I never received an apology and almost had to drop out of school due to the loss of a full month’s pay. On my last day my boss deliberately avoided me at all cost. The best part is that I recently heard that my boss just got promoted to the VP of the business affairs department.”

 The intellectual fruits are often seized by others

I am eager to explore the management reason of the failure of RIM with any possibility, especially, I would eagerly ask related questions as long as meet the people who once worked in RIM.

In around 16:10 June 26, 2014, I discussed the such issue of RIM with an art profession specialist who once worked in RIM for many years and now working as a general operator in the production line of the foods processing – DC Foods Waterloo.

She said that there was also the management for the rationalization proposals in former RIM. However, the fruits of the achievements of the rationalization proposals were seized by the management staff, so the technical personnel of the main body for the rationalization proposals stopped their effort on any proposals.

She also said that, in former RIM there were also comprehensive regulations as that of other well managed world class companies, but, the regulations cannot function effectively, due to that managements play with own preferred accord with ignoring the regulations.

As my experiences from working in many different businesses, compared with foreign one, in Canadian businesses, for most management staff of locals, there are no sense for that what is the regulation, even, no sense of what is law?   

Then, what is high efficient prescription for entirely rebirth of the Blackberry.

 ZTE Corporation is a China’s multinational telecommunications equipment and systems company founded in 1985 and head-quartered in Shenzhen, China in three business units - Carrier Networks(54%)-Terminals(29%)-Telecommunication(17%). ZTE is one of the top five largest smart phone manufacturers in its home market, and in the top ten, worldwide.

From China's ZTE Corporation's products and 30 years of successful development, I can not help but think of Canada's former RIM that was in similar field and found in 1984. While China's one is growing up, Canada's one was downsized as Blackberry Ltd.

What is the causes of such a different consequence.

April 30, 2015, China Central Television - CCTV reports the management innovation in ZTE, I think there is significant reference meaning to Blackberry – the former RIM, so I especially excerpts translated some significant episode as follows.

There are 107 branches at home and abroad and 8% of 70,000 employees is in administration. There 17 are senior management with average age of 47 years old.

The biggest problem of Enterprise is the barriers for well cooperation between departments, and the slow in decision-making. ZTE decided to carry out corporate management reform to quickly adapt to market changes.

However, after 30 years of development, a lot of running pattern has been formed and all staff have used to it with seeing it is as norms. The habit is not easy to change. For management reform, the most difficult is to find out the problems. Who would like to do such a things that is doomed to offend massive others.

The video immediately shows that, in every quarter, the management consulting guru in ranking first in the world Mr. Ram Charan comes to ZTE for carrying out advisory activities.

For ZTE executives, every time meet with Ram Charan, are all feeling as facing a major surgery, because that Ram Charan will make operation for a management problem. This time, he will solve the thorniest problem for any businesses – dealing with management personnel.

Ram Charan said that, we should focus on the issues of management staff in key areas, the project management. The project management is a kind of way of life, because we create new products, new research to cover new markets. It is looking for the project and to be implemented into improvement of company's efficiency. At this point,  ZTE has made good progress. Of course, there is still great room for improvement.

Video also mentioned that open declared remuneration of Mr. Ram Charan is $ 20,000 hourly (I think he will spend a lot of time for preparation, if we take this into account, the average hourly paid rate will be much less).

Senior vice president in responsible for enterprise architecture, Chen Jianzhou who firstly suggested to invite Ram Charan, due to that he analyzed many historical situation of multinational companies’ transformation, to have realized that the transformation is not easy; the success rate is not high. In order to promote the company transformation smoothly and quickly, he believe that company needs external professional talent.

Mr. Ram Charan emphasizes that insight into customer, the user's behavior, what is users’ like and how can be outstanding in competition? Such things are the most important.

He said that great enterprises have a common characteristic, it is that they can continuously capture external changes, and to make adjustment according to external changes, China has entered the global market, the China’s government, is creating better operating conditions, which will be given more freedom, and to bring more competition, companies must adapt to the new competition rules, that is huge challenge for companies’ transformation.

Regarding dealing with personnel issues, whether the executives are competent? He tests by requesting senior executives to study the financial statement of company. A qualified executive must be able to identify problems through the financial data. He often makes spot checks through private conversations. It was a window that Ran Charan tests the health level of the enterprise.

In first day first time Mr. Ram Charan came to ZTE, he casually asked executives some operating data that must be skillful memorized, but, few of them can answer, to have made an awkward scene.

In the discussion of some specific project, some people mentioned that he needs the support from other department. He unceremoniously interrupted the speaker: which department? Who is needed? What is to do for you? And how long time to complete?

Repeatedly as this, he often made senior executives embarrassed, but, he still sticks to his stand, because he is toward problem, not toward any individual.

ZTE chairman said that: large enterprise has disease of large enterprise, treated, recovered, but, will get new kind disease again, thus endless. The large enterprise with more resources makes it more competitive. However, precisely say, because that people are more and the resources are more, so that flexibly mobilize them is not easy. Each team has its own calculator for own selfish interest thinking: if I help you, you create a performance, and then, where is my performance? This naturally and inevitably occurred mode of thinking in large enterprise would certainly cause the difficulty for scheduling and integrating the resources.

Like a community, large enterprise has unspoken rules also to be obeyed by employees. The procrastination in work, unclear in responsibilities and rights, such problems are badly affect the systematic efficiency, even kill a good business. The causes are known very well by everyone, but, there no one is like to put them on the table. This is crowd psychology that will occur when people grouping in regardless with race and nationality. This is the thorniest problem in corporate management. Such thorny problems are turned out one by one when discussion with Ram Charan. And they are solved by divided into projects of human resources, cost control, performance breakthroughs and so on.

In order to solve the problem of corporate strategic objective to be decentralized, Ram Charan recommended ZTE to adopt mechanism of president of the joint meeting.

At the start of every year, the executives elected 5 projects to focus on promoting in this year, and around five goals, to make clear the tasks for various departments, to set agreements for across sectors cooperation, to be promoted by responsible person replies regularly to ensure that the company's goals are clear from top to bottom and is able to be concerted in action.

In original conference room, the comfortable sofa chairs were moved out, the decoration on the walls has also been replaced by whiteboard that can be casually scribbling. Every Tuesday, in this room, the top executives hold regular meeting. In order to achieve the objectives of the meeting efficiently, the participants have to standing.

The assistant to the president, Dai Peng said that: when discussion of some specific project, the executives that related with the project is all in the conference room to make decisions on-site. When project encounters problem, there is no one shuffling or complaining, but, putting forward how to help each other solve the problems. Such process is very simple, but, very effective. Since the program of president of the joint meeting launched in last November, the efficiency of meeting and the flow process of the project development, etc., from a statistical point of view, are accelerated and more efficient.

      

       

Above is the flow charts of project scheduling in ZTE Research Institute that located in Xi'an City China. The Mandarin titles that can see clear are: waits for developing, in developing, waits for verifying, in verifying, had delivered, and in obstruction......

In Xi'an Research Institute, every day holds morning meeting. Everyone's working process and the target of the day are all posted into the flow charts. For any delay, the project leader must be clear at first time and have to propose a solution. It is said that this method can increase the efficiency of R & D by 50%.

The president of the Research Institute was asking a researcher: why was delayed? This is a voice-based technology. The researcher replied that he needs a special meter.

For such a harsh working way, the president told reporter that: there is no way; the lead times for Internet companies are shorter and shorter. For example, in the last year, the lead time was one year; this year is six months, and next year, may be only three months. He continued with that, originally, our field of industry was easily to earn good money, but, now, it is more and more difficult. The reason is that the Internet with other industries integrated closer and closer. We have to make some quick changes, so that our products’ adaptability can be much wider. 

                    

In ZTE Shenzhen headquarter, it was 21 pm, still there is commuter bus to send overtime employee home.

In order to save time, even, there are employees to sleep in the office. 

After the help of Mr. Ram Charan, we can see the reviving of ZTE - from top level or may say that is also from root level, by a easy way, to have avoided the fatal disease of the large enterprise – low efficiency - procrastination in work, the barriers in cooperation between departments, and unclear in responsibilities and rights……

The reason analysis for the success of Mr. Ram Charan.

1…A China’s saying goes; the monk from far distance is easy for chanting. The unique advantage of Ram Charan is as temporary consultant outside of company without the fear of breaking the friendship with others.

Nov. 4, 2013, Family Business and Management Board, I have said that, within the business, because of the members are familiar each other with friendship, even kinship, so that it is difficult to deal impartially with some problems that happened in business operation due to the worry of harming friendship or losing friends. In particular, the embarrass that produced when pointing out the shortcomings in face to face. By establishing the Management Board and collectively make decision in document form, that some thorny problems may much easily be handled.

To hire some professional people outside of the family to establish a management board has unique advantage, because of those new comers have no former relations in vital interest with those original employees, they will be able to relieve or resolve down the conflict that may originally exist between the employees and bosses. Such conflicts are hardly to handle. The harm for the enterprise is fatal.

2…As a world-renowned management consultant, the outstanding personal prestige will help him to reduce unnecessary trouble in work.

The success of many international well-known large enterprises has the decisive contribution of Ram Charan.

I searched some information about Dr. Ram Charan.

Dr. Charan runs his business management consulting company under the name Charan Associates located in Dallas, TX. Records show the company was established in 1981 and incorporated in Texas. Charan sits on the board for Austin Industries, SSA & Company (formerly Six Sigma Academy), and TE Connectivity.

Dr. Ram Charan has published 19 best-selling books in management.

As the world's most prestigious management consultant, the views of Dr. Ram Charan have a strong practical operational advantage. Moreover, he has strong foundation in the area of profit growth, leadership, social systems reform, corporate governance, global matrix organization, innovation, etc..

His every book has attracting enormous attention and sensation in the global business community, especially the EXECUTION - The Discipline of Getting Things Done, and the EVERY BUSINESS IS A GROWTH BUSINESS - How Your Company Can Prosper Year After Year. He received his MBA and DBA degrees from Harvard Business School.

Over the past 40 years, Dr. Ram Charan has been working as executive consultant for dozens of Fortune 500 companies, such as General Electric, DuPont, Ford, Bank of America, and Intel……

He was Jack ? Welch most respected Advisory master.

Jack Welch respected Dr. Ram Charan as that: "He has a rare ability to extract meaning from meaningless things, and in a calm and effective manner to affect others."

When Jeff ? Immelt took over the position of Jack ? Welch, Dr. Ram Charan was the counsel of his first outward for advising. In 2007, it was 37 years of Dr. Charan working for General Electric Company, and 33 years working for the DuPont.

“Head in, hands on”: Ram Charan on How to Lead Now

Christina Bielaszka-DuVernay FEBRUARY 11, 2009

https://hbr.org/2009/02/ram-charan-interview

Renowned business adviser Ram Charan’s latest book is Leadership in the Era of Economic Uncertainty: The New Rules for Getting the Right Things Done in Difficult Times (McGraw-Hill, 2008). He recently spoke with Christina Bielaszka-DuVernay, a HarvardBusiness.org editor, about the challenges — and opportunities — this downturn presents to companies and their leaders. In this edited record of their conversation, Charan gives leaders at all levels advice on guiding their organizations and people through this crisis and coming out stronger on the other side.

CBD: What’s most important for leaders — not just CEOs and senior executives but leaders throughout the ranks — to focus on right now?

RC: In these times more than other times, first and foremost is demonstrating personal integrity and maintaining your personal credibility. They are so important in tough times, yet many leaders lose their integrity and destroy their credibility by giving into the temptation to cut corners when they have to do unpleasant tasks like downsizing. For example, a business-unit head, instead of being transparent about why he needs to cut 10 jobs, gives a partial truth or makes an excuse. That’s a way of cutting corners, and it’s destructive. In the Google era, people will find out the truth and that leader will lose credibility, making his job even more difficult.

Tell people the truth. Gather information — from customers, from your customer-facing employees, from sources outside the firm. Talk to employees throughout the company; listen to their viewpoints and engage them. When you have a firm picture of reality, share it. Tell people the reality — if the company doesn’t take action now and cut some jobs, even more good people will lose jobs later. In this environment, the entire company could fail as a result of a leader failing to make hard decisions when they’re needed.

If you have to make layoffs, make them in a fair, open way. Be frank; explain what’s happening on the outside and why layoffs are necessary to protect good people and good jobs.

Authenticity is always important but now it’s absolutely critical. Leaders, wherever they sit in the organization, have to demonstrate rock-solid integrity, honesty, and the ability to confront reality. The way to inspire courage and optimism in your employees is by mapping a credible path forward. If you soft-pedal bad news, they won’t trust you. Worse, they’ll miss the urgency of the situation and won’t follow you.

In your book you advise leaders to practice “management intensity.” What is this and why is it so important now?

I define management intensity as a deep immersion in the business’s operational details and the day-to-day competitive climate the business is facing, along with hands-on involvement and follow-through.

It’s so important now because of the accelerating speed at which things are changing. Surviving a volatile environment requires frequent operational adjustments. You hear every day about new layoffs and downward projections. Keeping up with news like that and tracking its effects is crucial, because a cut today will initiate cuts elsewhere tomorrow. It’s not enough to sit in your office and read reports and issue directives. You’ve got to know what’s happening daily, and adjust plans and processes accordingly.

Big-picture strategic thinking is still important, but it must take a back seat to this operational immersion — leaders need to be involved and visible, and communicating all the time. As I explain in the book, your guiding principle should be this: Head in, hands on. Only in this way will you be able to anticipate what’s coming next and respond quickly and appropriately.

Does management intensity place a greater emphasis on execution than what’s called for in more flush times?

Yes — management intensity calls for a sharper and more frequent focus on execution. The DuPont story I tell in my book is a good example of what I mean. When Chad Holliday [then DuPont’s CEO; now its chairman] determined that the global banking crisis had spread beyond the financial sector and could seriously affect his company, he called a meeting of DuPont’s crisis teams. Over four days, they put together a plan to deal with the growing economic downturn. Conserving cash was the top priority.

Within two weeks, every one of DuPont’s 60,000 employees had had a face-to-face meeting with a manager who explained the plan for keeping DuPont viable. Each employee was asked to name three things he could do immediately to save money and conserve cash. Then a few days later, the company polled employees to assess their understanding of the crisis, their psychological response to it, and their follow-through on conserving cash.

After this first round of communication with DuPont employees, you report in your book, Holliday had the sense that people hadn’t grasped the urgency of the situation. You quote him as saying that “maybe we were too good at giving [employees] the reassurance and confidence that we could come through this.” What balance should leaders strike right now between realism and optimism?

Realism is not negotiable. It’s absolutely essential to anyone who leads. You need to have a clear picture of how bad things are and how bad things could get, then put that reality in front of people.

Realism also includes determining under what conditions the business will improve, and communicating those scenarios. That’s optimism grounded in solid realism.

People through the centuries have gone through some very difficult times. Those who succeeded despite challenging conditions did so because they were tough and tenacious. You have tough and tenacious people working for you; engage them by putting the hard issues right in front of them. They will be motivated to overcome the challenges.

Isn’t there a danger that people will become demoralized by the enormity of the challenges? How does a leader prevent that from happening?

Give them the problems in bite sizes. Put a challenge in front of them that’s specific and concrete enough to deal with. For instance, if your competitor has a 20% win ratio, challenge them to get 30%. Even though the total market is declining, even though your company’s revenues will be smaller, you and your employees still have a chance to compete and to beat somebody.

These are anxious times. How should leaders manage their own emotions?

Actually, in a crisis most leaders tend to be too optimistic rather than the contrary. They overestimate how well their company will fare because they want to believe everything will turn out well. This misplaced optimism allows them to think that they don’t have to make painful decisions or take drastic action.

To guard against this, I advise all leaders to map out worst-case scenarios. If you deliberately plan for the worst, you’ll probably encounter something less dire and come out ahead when it’s all over.

In your book you say that surviving this downturn requires intense coordination across the company. What can the CEO do to pull down silos and foster companywide coordination? What can midlevel leaders do?

Any leader at any level can figure out what key decisions must be made and what coordination is required to implement them. Say your unit aims to launch a new product by July. You know what decisions you will have to make around that goal. So move swiftly to get the best information you can, then make the best decisions you can.

You know there will be three or four silos involved. Check in with people from those areas frequently, asking questions and exploring issues with an open, informal tone. Remind them of your shared purpose: to win with customers. Human beings like to win, and in companies, no one wins alone.

It might help to think that the situation you and your colleagues face is akin to a basketball game. Players make judgments constantly about the game as it’s in progress, instinctively passing the ball to a teammate to counter the defense, without worrying about who’s going to get the credit. Basketball is a sport of speed, flexibility, and synchronization. The same qualities are demanded of cross-functional teams in this recession. What department or function teammates come from doesn’t matter; what matters is that they’re united against the competition.

You teach a class at Wharton for high potentials. What’s your advice to high potentials in this downturn?

If you’re a high potential, act like one and keep building your capabilities; this recession doesn’t have to slow you down. In fact, it offers you opportunities that normal times don’t. Wherever you work, it’s likely that there is a shortage of really talented, motivated people with the flexibility and resilience to weather these tough times. So step forward and get noticed. Get on cross-functional teams. Learn and lead. Build social networks. Set benchmarks for yourself — use the next two years to double your capacity and triple your capabilities.

What will the best companies do during this recession?

They’ll get ahead the curve and conserve their cash. They’ll take out frills and focus on the core. And then they’ll think of how the market will have changed in two or three years and what innovation they will need to have done to compete successfully, and they’ll do that innovation now. 

The strange existence of Ram Charan

What he does is hard to describe. But the most powerful CEOs love it enough to keep him on the road 24/7 and make him the most influential consultant alive. Fortune's David Whitford reports.

David Whitford, Fortune writer  April 24 2007: 9:12 AM EDT

http://archive.fortune.com/magazines/fortune/fortune_archive/2007/04/30/8405482/index.htm

(Fortune Magazine) -- The Al Manzil Hotel in Dubai has been open for business all of 18 days on the Saturday night in January that I show up with Ram Charan. The lobby is strangely quiet; there doesn't seem to be anybody else staying here. The surrounding neighborhood is called Old Town, but in fact it's a construction site from which are rising what will one day be the world's tallest skyscraper and the world's biggest mall. Soulless and kind of creepy, I'm thinking, but Charan's thoughts are elsewhere.

Already he has claimed an overstuffed chair in the center of the lobby and is talking on the phone. After 12 hours of isolation on the flight from J.F.K., Charan is back in business, deep in private conversation with a client in New York City. He looks tired, and no wonder. He began his day with a 4 A.M. Friday wake-up call in Richmond (he did a Squawk Box live remote on CNBC), and he has a head cold. But he is in no hurry to go to bed. Charan doesn't care what time it is. He doesn't care what day of the week it is. And the last thing he cares about is where he is. As long as Charan is with a client - or can get one on the phone - he's home.

Thirty years ago this month, Ram Charan (pronounced "Rahm Scha-RON") quit a tenured professorship at Boston University to devote himself full-time to consulting. Today he's alone at the top of his profession - not a consultant so much as a guru, a corporate sage, with unparalleled access to boardrooms across the globe and intimate, enduring relationships with an array of powerful CEOs.

Among them: Jack Welch, formerly of GE (Charts,Fortune 500), who says of Charan, "He has this rare ability to distill meaningful from meaningless and transfer it to others in a quiet, effective way without destroying confidences"; Dick Harrington ofThomson Corp. (Charts) ("He probably knows more about corporate America than anybody"); andVerizon's (Charts, Fortune 500) Ivan Seidenberg ("I love him. He's my secret weapon"). "He's like your conscience," says former Citicorp CEO John Reed. "Just when you sort of think you have everything done and you're feeling pretty good about yourself, he calls you up and says, 'Hey, Reed, did you do this and that and the other?'"

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There's another aspect of Charan, not unrelated to his success, that sets him apart from his peers, if not the whole human race: what Jack Krol calls Charan's "strange existence." "When I was chairman and CEO of DuPont," says Krol, "he'd show up at the house Sunday morning at nine, and we might spend three or four hours, and all of a sudden he'd disappear. He would go anywhere at any time that you asked him to meet with you. Business is his whole life."